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The amount that loss-making small and medium sized enterprises (SMEs) can claim in research and development (R&D) tax credits will be capped as part of changes originally slated for introduction last year.
The so-called PAYE cap is designed to prevent abuse of this valuable form of tax relief and comes into effect on 1 April. However there has been a last minute change to the commencement rules. In an email to R&D consultative committee members on Budget day HMRC indicated that the draft legislation will now not include a ‘straddle’ rule and the cap will apply only for accounting periods beginning on or after 1 April 2021. This is not what was said in the initial draft legislation which included a rule to deal with periods that straddled 1 April so this is good news.
Who is affected?
The PAYE cap affects R&D tax relief claims...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
